|
EBRD loan to promote energy sector reform in Azerbaijan
$115 million for rehabilitation of Azerbaijan Thermal Power Plant
A $115 million loan by the EBRD to Azerenergy JSC for the rehabilitation of
the Azerbaijan Thermal Power Plant (TPP) is set to boost the reform of the
energy sector in Azerbaijan. The loan will finance investments to improve the
plant’s reliability, its efficiency, health and safety conditions on site and
to reduce carbon dioxide emissions. With a capacity of 2,400 MW, Azerbaijan
TPP is the country’s largest power plant in Azerbaijan.
The sovereign-guaranteed loan addresses the reform of the energy sector to
which Azerbaijan has committed itself in close cooperation with international
financial institutions. The EBRD loan pursues a number of challenging
objectives in term of tariff regulation, financial reporting and qualification
under the Kyoto Protocol for Clean Development Mechanism. It is estimated that
carbon dioxide emissions can be reduced by 8.2 million tonnes between 2006 and
2012 thus allowing the company to qualify for carbon credits which would
provide an additional source of income.
The Azerbaijan TPP consists of eight dual fuel, gas and heavy fuel oil units
of 300 MW each. The plant is currently operating below its potential capacity
and efficiency levels. This has strong repercussions as Azerbaijan TPP is
providing half the country’s electricity generation and demand is increasing
strongly thanks to a fast growing economy.
Mike Davey, EBRD Director for Caucasus, Moldova and Belarus, said the loan
will ensure the implementation of energy sector reform which will lead to
greater transparency and efficiency. Together with the increased output of
Azerbaijan TPP after the implementation of the rehabilitation programme this
will help Azerbaijan to significantly improve its energy security and reduce
carbon dioxide emissions.
The EBRD has been involved in the power sector of Azerbaijan since 1994
through financing the hydropower plant Yenikend, completed in 2000, and
Mingechaur, completed in 2003. The loan to Azerernergy is supported by
technical cooperation grants from the US Trade Development Agency and the
EBRD’s donor-sponsored ETC Fund.
|
